Yesterday, the House passed the Patient Protection and Affordable Care Act by a 219-212 vote, to be signed into law tomorrow. The landmark legislation establishes a fundamental social precedent, putting our country on the path toward a healthier future for all Americans. After nearly 100 years of debate, we finally decided as a society that health care is not merely a privilege of the few, but a right for all.

In the coming days, we have many to thank personally and just cause to celebrate. This moment could not have been achieved without the steadfast leadership of our elected officials and the tireless efforts of countless health advocates. We sincerely thank all of our colleagues, supporters and readers for making coverage of the uninsured a priority in their lives. The law's passage is truly only the beginning and we are even more motivated to begin the critical process of implementation, looking forward to the day when America's universal health care system will be the world's finest.

"Americans can always be counted on to do the right thing...after they have exhausted all other possibilities." -Winston Churchill

The President's speech today issued a clear path toward reform's passage, calling for an effective end to this legislation's journey and an up-or-down vote within weeks. Obama rejected the idea of piecemeal reform, recognized fundamental partisan divides over an incredibly complex and personal issue, and relayed a rightful sense of urgency for all those facing medical and financial peril. Most importantly, he reminded the nation that legislation has already passed a majority in the House and a supermajority in the Senate, and that "America deserves a final vote."

It is clear that the House must first pass the Senate bill before considering a reconciliation 'fix,' as a law must exist before it is amended. Though not explicitly using the word 'Reconciliation' he referenced other vital legislation that has followed that very path, including welfare reform, CHIP, COBRA, and the Bush tax cuts. Legislative language on the companion bill could go to the CBO as early as the end of the week, and once the House receives assurance from the Senate that this process will be pursued (most likely through a 51-Senator-signed letter), we can expect reluctant House members to publicly state their position. You may wish let your Congressional representatives know your views on this path forward.

Below are the President's comments in full. Added emphases are mine.

"Good afternoon. We began our push to reform health insurance last March with the doctors and nurses who know the system best, and so it is fitting to be joined by all of you as we bring this journey to a close.

Last Thursday, I spent seven hours at a summit where Democrats and Republicans engaged in a public and substantive discussion about health care. This meeting capped off a debate that began with a similar summit nearly one year ago. Since then, every idea has been put on the table. Every argument has been made. Everything there is to say about health care has been said and just about everyone has said it. So now is the time to make a decision about how to finally reform health care so that it works, not just for the insurance companies, but for America’s families and businesses.

Where both sides say they agree is that the status quo is not working for the American people. Health insurance is becoming more expensive by the day. Families can’t afford it. Businesses can’t afford it. The federal government can’t afford it. Smaller businesses and individuals who don’t get coverage at work are squeezed especially hard. And insurance companies freely ration health care based on who’s sick and who’s healthy; who can pay and who can’t.

Democrats and Republicans agree that this is a serious problem for America. And we agree that if we do nothing – if we throw up our hands and walk away – it’s a problem that will only grow worse. More Americans will lose their family’s health insurance if they switch jobs or lose their job. More small businesses will be forced to choose between health care and hiring. More insurance companies will deny people coverage who have preexisting conditions, or drop people’s coverage when they get sick and need it most. And the rising cost of Medicare and Medicaid will sink our government deeper and deeper into debt. On all of this we agree.

So the question is, what do we do about it?

On one end of the spectrum, there are some who have suggested scrapping our system of private insurance and replacing it with government-run health care. Though many other countries have such a system, in America it would be neither practical nor realistic.

On the other end of the spectrum, there are those, including most Republicans in Congress, who believe the answer is to loosen regulations on the insurance industry – whether it’s state consumer protections or minimum standards for the kind of insurance they can sell. I disagree with that approach. I’m concerned that this would only give the insurance industry even freer rein to raise premiums and deny care.

I don’t believe we should give government bureaucrats or insurance company bureaucrats more control over health care in America. I believe it’s time to give the American people more control over their own health insurance. I don’t believe we can afford to leave life-and-death decisions about health care to the discretion of insurance company executives alone. I believe that doctors and nurses like the ones in this room should be free to decide what’s best for their patients.

The proposal I’ve put forward gives Americans more control over their health care by holding insurance companies more accountable. It builds on the current system where most Americans get their health insurance from their employer. If you like your plan, you can keep your plan. If you like your doctor, you can keep your doctor. Because I can tell you that as the father of two young girls, I wouldn’t want any plan that interferes with the relationship between a family and their doctor.

Essentially, my proposal would change three things about the current health care system:

First, it would end the worst practices of insurance companies. No longer would they be able to deny your coverage because of a pre-existing condition. No longer would they be able to drop your coverage because you got sick. No longer would they be able to force you to pay unlimited amounts of money out of your own pocket. No longer would they be able to arbitrarily and massively raise premiums like Anthem Blue Cross recently tried to do in California. Those practices would end.

Second, my proposal would give uninsured individuals and small business owners the same kind of choice of private health insurance that Members of Congress get for themselves. Because if it’s good enough for Members of Congress, it’s good enough for the people who pay their salaries. The reason federal employees get a good deal on health insurance is that we all participate in an insurance marketplace where insurance companies give better rates and coverage because we give them more customers. This is an idea that many Republicans have embraced in the past. And my proposal says that if you still can’t afford the insurance in this new marketplace, we will offer you tax credits to do so – tax credits that add up to the largest middle class tax cut for health care in history. After all, the wealthiest among us can already buy the best insurance there is, and the least well-off are able to get coverage through Medicaid. But it’s the middle-class that gets squeezed, and that’s who we have to help.

Now, it’s true that all of this will cost money – about $100 billion per year. But most of this comes from the nearly $2 trillion a year that America already spends on health care. It’s just that right now, a lot of that money is being wasted or spent badly. With this plan, we’re going to make sure the dollars we spend go toward making insurance more affordable and more secure. We’re also going to eliminate wasteful taxpayer subsidies that currently go to insurance and pharmaceutical companies, set a new fee on insurance companies that stand to gain as millions of Americans are able to buy insurance, and make sure the wealthiest Americans pay their fair share of Medicare.

The bottom line is, our proposal is paid for. And all new money generated in this plan would go back to small businesses and middle-class families who can’t afford health insurance. It would lower prescription drug prices for seniors. And it would help train new doctors and nurses to provide care for American families.

Finally, my proposal would bring down the cost of health care for millions – families, businesses, and the federal government. We have now incorporated most of the serious ideas from across the political spectrum about how to contain the rising cost of health care – ideas that go after the waste and abuse in our system, especially in programs like Medicare. But we do this while protecting Medicare benefits, and extending the financial stability of the program by nearly a decade.

Our cost-cutting measures mirror most of the proposals in the current Senate bill, which reduces most people’s premiums and brings down our deficit by up to $1 trillion over the next two decades. And those aren’t my numbers – they are the savings determined by the CBO, which is the Washington acronym for the nonpartisan, independent referee of Congress.

So this is our proposal. This is where we’ve ended up. It’s an approach that has been debated and changed and I believe improved over the last year. It incorporates the best ideas from Democrats and Republicans – including some of the ideas that Republicans offered during the health care summit, like funding state grants on medical malpractice reform and curbing waste, fraud, and abuse in the health care system. My proposal also gets rid of many of the provisions that had no place in health care reform – provisions that were more about winning individual votes in Congress than improving health care for all Americans.

Now, despite all that we agree on and all the Republican ideas we’ve incorporated, many Republicans in Congress just have a fundamental disagreement over whether we should have more or less oversight of insurance companies. And if they truly believe that less regulation would lead to higher quality, more affordable health insurance, then they should vote against the proposal I’ve put forward.

Some also believe that we should instead pursue a piecemeal approach to health insurance reform, where we just tinker around the edges of this challenge for the next few years. Even those who acknowledge the problem of the uninsured say that we can’t afford to help them – which is why the Republican proposal only covers three million uninsured Americans while we cover over 31 million. But the problem with that approach is that unless everyone has access to affordable coverage, you can’t prevent insurance companies from denying coverage based on pre-existing conditions; you can’t limit the amount families are forced to pay out of their own pockets; and you don’t do anything about the fact that taxpayers end up subsidizing the uninsured when they’re forced to go to the Emergency Room for care. The fact is, health reform only works if you take care of all these problems at once.

Both during and after last week’s summit, Republicans in Congress insisted that the only acceptable course on health care reform is to start over. But given these honest and substantial differences between the parties about the need to regulate the insurance industry and the need to help millions of middle-class families get insurance, I do not see how another year of negotiations would help. Moreover, the insurance companies aren’t starting over. They are continuing to raise premiums and deny coverage as we speak. For us to start over now could simply lead to delay that could last for another decade or even more. The American people, and the U.S. economy, just can’t wait that long.

So, no matter which approach you favor, I believe the United States Congress owes the American people a final vote on health care reform. We have debated this issue thoroughly, not just for a year, but for decades. Reform has already passed the House with a majority. It has already passed the Senate with a supermajority of sixty votes. And now it deserves the same kind of up-or-down vote that was cast on welfare reform, the Children’s Health Insurance Program, COBRA health coverage for the unemployed, and both Bush tax cuts – all of which had to pass Congress with nothing more than a simple majority.

I have therefore asked leaders in both of Houses of Congress to finish their work and schedule a vote in the next few weeks. From now until then, I will do everything in my power to make the case for reform. And I urge every American who wants this reform to make their voice heard as well – every family, every business owner, every patient, every doctor, every nurse.

This has been a long and wrenching debate. It has stoked great passions among the American people and their representatives. And that is because health care is a difficult issue. It is a complicated issue. As all of you know from experience, health care can literally be an issue of life or death. As a result, it easily lends itself to demagoguery and political gamesmanship; misrepresentation and misunderstanding.

But that’s not an excuse for those of us who were sent here to lead to just walk away. We can’t just give up because the politics are hard. I know there’s a fascination, bordering on obsession, in the media and in this town about what passing health insurance reform would mean for the next election and the one after that. Well, I’ll leave others to sift through the politics. Because that’s not what this is about. That’s not why we’re here.

This is about what reform would mean for the mother with breast cancer whose insurance company will finally have to pay for her chemotherapy. This is about what reform would mean for the small business owner who will no longer have to choose between hiring more workers or offering coverage to the employees she has. This is about what reform would mean for the middle-class family who will be able to afford health insurance for the very first time in their lives.

And this is about what reform would mean for all those men and women I’ve met over the last few years who’ve been brave enough to share their stories. When we started our push for reform last year, I talked about a young mother in Wisconsin named Laura Klitzka [KLITZ kah]. She has two young children. She thought she had beaten her breast cancer but then later discovered it spread to her bones. She and her husband were working – and had insurance – but their medical bills still landed them in debt. And now she spends time worrying about that debt when all she wants to do is spend time with her children and focus on getting well.

This should not happen in the United States of America. And it doesn’t have to. In the end, that’s what this debate is about – it’s about the kind of country we want to be. It’s about the millions of lives that would be touched and in some cases saved by making private health insurance more secure and more affordable.

At stake right now is not just our ability to solve this problem, but our ability to solve any problem. The American people want to know if it’s still possible for Washington to look out for their interests and their future. They are waiting for us to act. They are waiting for us to lead. And as long as I hold this office, I intend to provide that leadership. I don’t know how this plays politically, but I know it’s right. And so I ask Congress to finish its work, and I look forward to signing this reform into law. Thank you."

President Obama issued a letter to Congressional leadership today, outlining the Republican priorities that he agrees with and wishes to pursue in his Compromise 2.0 to be released tomorrow. These include 1) undercover health professionals to deter fraud and waste in Medicare and Medicaid, 2) additional appropriations for state malpractice reform, 3) increasing reimbursements under Medicaid, and 4) inclusion of high-deductible plans into the Exchange, in conjunction with Health Savings Accounts (HSAs).

The final provision is the most noticeable, and has it pros and cons. High-deductible plans are often not adequate in providing sufficient comprehensive coverage, though the inclusion of 'young invincible' policies in the federal reform bills do mandate preventive services. If ultimately included, the combination with HSAs could make individuals more cost conscious of their health care, but it is necessary that individuals do not become underinsured and are protected with cost-sharing maximums. The letter ends with strong language recognizing the major rifts between the Democrats and Republicans, but rejects the case for piecemeal reform. Read the full letter here.

A 3-step timeline has also been proposed in a memo obtained by Inside Health Policy:

According to the Democratic memo, the timeline may be:

Step one: The House passes the Senate's health reform bill by March 19. The bill then goes to the president for signature without going through conference.

As part of this step, there are reports that House leaders want to see a letter signed by at least 50 Senate Democrats committing to passing tweaks to the Senate bill worked out between the two chambers, but a Democratic policy consultant says such a letter is unlikely to transpire. More likely, the source said, Senate Majority Leader Harry Reid (D-NV) would privately vow to House Speaker Nancy Pelosi (D-CA) that he has the votes.

Step two: After the Senate bill becomes law, the House then amends the Senate bill through a reconciliation bill, to be passed by March 21.That bill would be the only opportunity to amend, add or strike provisions in the Senate bill.

Step three: The Senate begins debate on the reconciliation bill by March 23. Debate is limited to 30 hours. Votes begin March 26, the first day of Easter recess, at which point Reid announces that the Senate will stay in session through recess to consider all amendments. Vote on final passage follows consideration of the last amendment.

The goal is to pass health reform before the Spring recess (March 29-April 9), so as to avoid a repeat of last year's brutal August break, sources said.

Senate whip count update: 43 Senators are now on record in support of reconciliation and 35 support inclusion of a public option.

Below is the full White House Health Reform Compromise, as well as the ITUP Summary for your reference:

President's Key Improvements

ITUP Summary of the President's Health Reform Compromise

Also, here are two interesting takes on the state of the public option:

ONE

TWO

...won't actually be a bill but rather a collection of compromises to bridge the House and Senate versions in anticipation of the February 25th Summit. The following ideas are expected to be included, using the not-officially-confirmed reconciliation process:

-Closing the Medicare doughnut hole
-A fix to the Cadillac tax (looking something like the version agreed upon with labor)
-Exchange structure (state or national?) and subsidy level (more generous in House version)
-Removal of Ben Nelson's special deal

Hot button issues like immigrant coverage, abortion, and the phoenix-like public option are not likely to be in Obama's 'bill,' though it may include additional conservative-supported provisions such as tort reform and interstate sale of insurance.

In other news, 2009 saw the largest single-year increase in Medicaid enrollment with 3.3 million people added to the ranks (7.5% increase, totaling nearly 47 million Americans), largely as a result of the economic downturn. Is this a good thing? For individuals and families who lose their job and employment-based insurance, absolutely. The program is extremely useful in acting as a counter-cyclic safety net when the economy goes south. For states (who partially fund the program), this is a not so good thing as revenue dips during such times and states do not have the luxury to deficit-spend leaving them cash-strapped. Additionally, millions who lose their job but do not qualify for Medicaid go uninsured adding unneeded costs to the system. Read the full KFF report here.

As with the Anthem example, this occurrence is tangible proof of the benefits of reform; states will receive many financial incentives through expansion of the Medicaid program, and the combination of the mandate/premium subsidies/consumer protections will provide a stable market where individuals have the security of health coverage no matter the state of the economy.

-The Congressional Roster of Participants, in addition to the Vice President, Secretary Sebelius, Office of Health Reform's Nancy-Ann DeParle, and representatives from the OMB and CBO.

-The Formal Invite, which interestingly implies that the President will unveil the final compromise between the current House and Senate bills before the event and asks the GOP to bring their own comprehensive bill (the invite also notably mentions the recent Anthem premium hikes here in California).

Discussion on the four essential goals of legislation, to be moderated by the President:

Insurance reforms
Cost containment
Expanding coverage
Impact on deficit reduction

The President attended the Senate Democratic Caucus retreat today, and explicitly urged the body to move on health reform while also fielding questions from the group. Below are excerpts from his commentary, and go here to see to the meeting in full (HCR at 11:, 18:, and 37:, and Barbara Boxer at 49: ).

“I’m reminded that when it came to the health insurance reform in particular, I sought out and supported Republican ideas from the start. So did Max Baucus...I think he can testify to spending a little time listening to Republican ideas, you considered hundreds of Republican amendments and incorporated many of their ideas into the legislation that passed the Senate. So when I start hearing that we should accept Republican ideas, let’s be clear: we have. What hasn’t happened is the other side accepting our ideas. And I told them I want to work together when we can, and I meant it. And I believe that’s the best way to get things done for the American people. But I — I also made it clear that we’ll call them out when — when they say they want to work with us and we extend a hand and get a fist in return...I would just suggest to this caucus, if anybody’s searching for a lesson from Massachusetts, I promise you the answer is not to do nothing.

So many of us campaigned on the idea that we were going to change this health care system. So many of us looked people in the eye, who had been denied because of a pre-existing condition or just didn’t have health insurance at all or small-business owners in our communities, who told us that their premiums had gone up 25 percent or 30 percent. And we said we were going to change it.

Well, here we are with a chance to change it. And all of you put extraordinary work last year into making serious changes that would not only reform the insurance industry, not only cover 30 million Americans, but would also bend the cost curve and save a trillion dollars on our deficits, according to the Congressional Budget Office.

There’s a direct link between the work that you guys did on that and the reason that you got into public office in the first place. And so as we think about moving forward, I hope we don’t lose sight of why we’re here. We’ve got to finish the job on health care."

I also wanted to mention another addition to the FY2011 federal budget, which will extend Cobra coverage for workers who lose their job through the end of 2010. The budget would subsidize 65% of the premiums and could continue for up to 12 months. The program has become increasingly popular since the its inception in the stimulus bill, improving enrollment of eligible employees from 19% to 39%.

The President's budget proposal was released today, which includes a combination of spending increases/decreases, tax cuts for the lower and middle class, and allows some high-income tax cuts to expire. In all, the 2011 budget totals $3.8 trillion and would reduce deficits by $1.25 trillion over 10 years compared to current policies.

As for the health related provisions, the budget includes some notable increases in spending in order to help cash-strapped states preserve vital programs, improve infrastructure investments, and initiate other projects. These increases are a testament to the necessity for comprehensive health reform (and may actually substitute for some of the larger bills' anticipated spending) in order to provide security and stability for Americans who are paying more and more for less and less high quality health care. The budget also properly frames health reform as the only path to long-term deficit reduction, and actually assumes $150B in deficit reduction in anticipation of the pending health reform bill passing.

Below are the health-related highlights from a useful OMB Fact Sheet, and you can find an informative HHS budget overview here.

-$25.5 billion for an additional 6 months of Federal Medicaid assistance to help states maintain their Medicaid programs and ensure access to health care for millions of Americans. (CA could receive $2-3B of the total)

-$2.5 billion for health centers to provide affordable high quality primary and preventive care to underserved populations, including the uninsured. This will allow health centers to continue to provide care to the 2 million additional patients they served under Recovery Act and support approximately 25 new health center sites. In 2008, health centers provided direct health care services to 17 million people.

-$110 million for continuing efforts to strengthen health IT policy, coordination, and research activities.

-$286 million for research that compares the effectiveness of different medical options, building on the expansion of this research begun under Recovery Act.

-New Medicare demonstration projects that evaluate reforms to provide higher quality care at lower costs, improve beneficiary education and understanding of benefits offered, and better align provider payments with costs and outcomes.

-$169 million in the National Health Service Corps (NHSC) to place providers in medically underserved areas to improve access to needed health care services. Under the NHSC, primary health professionals such as physicians, nurse practitioners, and dentists serve in a medically underserved community in exchange for having a portion of their student loans paid off.

-Add 400 NHSC clinicians to the more than 8,100 who will provide essential primary and preventative care services in health care facilities across the country.

-$20 million to fund a new effort in up to 10 of the largest U.S. cities to reduce the rates of morbidity and disability due to chronic disease.

-$10 million to improve workforce capacity of state and local health departments.

-$10 million for the federal employee workplace wellness initiative.

-Increase enrollment in the Children’s Health Insurance Program by 7 percent (more than 500,000 children) from 2008 to 2011.

"We're going to get it done this year. It would have been much easier to pass it in July. It would have been easier to pass it in November. But again, as the president said, it’s hard. We don’t give up just because things are hard in this country. And we shouldn’t give up – elected officials and leaders in the Congress should not give up just because it’s hard...There’s just a lot of technical questions, given the [reconciliation] process, that have to be answered. To get the little pieces to work you’ve got to have the main pieces of legislation that holds those together...We’ll go when we believe we have a bill that holds together and achieves the goals of reform and has the votes.”

Also watch this fascinating back-and-forth between the President and House Republicans (especially the Q&A) at the GOP Conference in Baltimore today, much of which harps on the health reform struggles (at 45:, 49:, and 80: ).

There have been varied reactions to the President's remarks last night on health reform, but advocates are generally satisfied with the tone that Obama established. He expanded further in a Town Hall today (after Min. 35), linking health reform as the key to effective deficit reduction. If you desired greater clarity, read Speaker Pelosi's comment from today's press briefing:

"You go through the gate. If the gate’s closed, you go over the fence. If the fence is too high, we’ll poll vault in. If that doesn’t work, we’ll parachute in. But we’re going to get health care reform passed for the American people.”

Head here for a great reflective piece by Anthony Wright, who describes the death of several health reform efforts in California and predicts a better future for the current federal effort. In response to the volume of misinformation out there, ITUP has developed a two-page Fact Sheet that describes what reform could tangibly mean for California, with footnotes to FACTUAL sources.

-Below is the State of the Union transcript related to federal health reform:

Now let’s be clear – I did not choose to tackle this issue to get some legislative victory under my belt. And by now it should be fairly obvious that I didn’t take on health care because it was good politics.

I took on health care because of the stories I’ve heard from Americans with pre-existing conditions whose lives depend on getting coverage; patients who’ve been denied coverage; and families – even those with insurance – who are just one illness away from financial ruin.

After nearly a century of trying, we are closer than ever to bringing more security to the lives of so many Americans. The approach we’ve taken would protect every American from the worst practices of the insurance industry. It would give small businesses and uninsured Americans a chance to choose an affordable health care plan in a competitive market. It would require every insurance plan to cover preventive care. And by the way, I want to acknowledge our First Lady, Michelle Obama, who this year is creating a national movement to tackle the epidemic of childhood obesity and make our kids healthier.

Our approach would preserve the right of Americans who have insurance to keep their doctor and their plan. It would reduce costs and premiums for millions of families and businesses. And according to the Congressional Budget Office – the independent organization that both parties have cited as the official scorekeeper for Congress – our approach would bring down the deficit by as much as $1 trillion over the next two decades.

Still, this is a complex issue, and the longer it was debated, the more skeptical people became. I take my share of the blame for not explaining it more clearly to the American people. And I know that with all the lobbying and horse-trading, this process left most Americans wondering what’s in it for them.

But I also know this problem is not going away. By the time I’m finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether. I will not walk away from these Americans, and neither should the people in this chamber.

As temperatures cool, I want everyone to take another look at the plan we’ve proposed. There’s a reason why many doctors, nurses, and health care experts who know our system best consider this approach a vast improvement over the status quo. But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. Here’s what I ask of Congress, though: Do not walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people.

Early reports indicate that the President's State of the Union address will provide some needed clarity amidst the plethora of speculation surrounding the fate of health reform. Though unlikely to prescribe a timed path, Obama should (hopefully) be able to negate the 'alternative' paths like a pared-down bill, or multiple 'popular' bills. Here is an early excerpt of the speech:

By the time I’m finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Co-pays will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether. I will not walk away from these Americans. And neither should the people in this chamber.

In Congress, Speak Pelosi floated a two-track strategy that is showing major support in the House. She verified that she would indeed have enough votes in the House through amendments in the reconciliation process, but also intends to fashion additional non-budgetary bills to ease her Caucus' concerns. For example, the repeal of the anti-trust exemption (a wildly popular provision in the House, but absent from the Senate bill) would not qualify as a budgetary issue under reconciliation but could be fast tracked as a separate bill to be voted on while the Reconciliation Bill develops and the Senate bill waits.

This would make House members uneasy with the Senate bill happier in the short run, provides tangible results for a disgruntled public, gives reconciliation a little breathing room to come to fruition, and most importantly keeps positive momentum towards comprehensive health reform. Like legislative appetizers before the main course.

Waking up today, federal health reform became a completely different beast. Seemingly inevitable legislation that would fundamentally transform the American health care system for the better is now showing signs of mortality. It would be too easy to lament on the "if only"s, and even easier to kick the can down the road. The fact is, though, both houses of Congress have already passed health reform legislation. Forever forward, regardless of the outcome, there is no escaping 'Yes' votes from those Congressmen that are fearful for his or her reelection as opposing candidates are going to use it against them in either case. That being said, the political risks of abandoning the plan are far greater than reaching compromise and sending a bill to the President. Substantive disagreements are debatable, but futility guarantees defeat.

So the question is, then, what are the next steps? To reduce the shock value and bring this situation back down to earth, read the latest from David Leonhardt. He posits that "the bills before Congress are politically partisan and substantively bipartisan" and explains the need to unify around an already centrist bill. How will this be done?

It's hard to say. The day has been filled with speculation, suggestion, and prognostication. Rumors of the bill being chopped up into pieces or vastly scaled down were rampant, though a White House memo indicates this is not likely. Persuading moderate Republicans in either the Senate or House is equally unlikely.

The greatest consensus, even backed by labor in SEIU's Andy Stern, would be to have the House pass the Senate version and attach a provision guaranteeing improvement (like the excise tax modifications and increased subsidies) through budget reconciliation from the Senate side. Kent Conrad expressed support for this as well, and Pelosi vowed the House would move forward with reform. Looking at this option, it appears that a group of House liberals (led by Raul Grijalva) are unwilling to accept the Senate bill as-is. It is quite possible that Pelosi would be willing to lose some liberals in favor of a more centrist bill if she can pick up enough moderate Dems along the way (remember that 39 Ds voted 'No' on the more robust House version).

We should be clearer on the chosen path in the next few days, as Congressional leadership and the White House appear committed to the cause they already own.

Meetings in the White House continued this afternoon after the conclusion of yesterday's 1 a.m marathon. Discussion centered around the types and extent of subsidies and benefits, though the President and Congressional leaders were unable to finalize a bill before the end of today's session. Talks are expected to continue tomorrow, though tangible progress was made today:

Biologics
Some more Presidential arm-twisting today, where it appears that Obama was able to reduce the exclusivity period of expensive biologic drugs (a $300B industry over the next 20 years) from 12 years to 10 years before introduction of generic versions.

Health Insurance Exchange
Though not finalized it appears the Exchange will be a hybrid of the two bills' versions, meaning a state-based structure with significant federal regulation and oversight (details to come).

Medicaid Financing
In the wake of the Nebraska debacle, Ben Nelson has called for the removal of his state's special treatment and it appears that Obama and lawmakers intend to increase the amount of federal aid to all 50 states for the Medicaid program (revenue for full financing is still being explored).

Insurance Subsidies
Aiming to improve affordability, it appears that an additional $10B in fees will be imposed on medical device manufacturers to provide additional subsidies for low-income individuals and families in the Exchange.

Insurer Antitrust Exemption
Here is a letter from a large group of Senators (including CA's Dianne Feinstein) calling for repeal of the exemption (in the House bill, not in the Senate bill):

Dear President Obama, Majority Leader Reid, and Speaker Pelosi:

The White House reached an agreement with Labor leaders today over the controversial excise tax. Unions had major concerns with the tax on high-cost plans, as collective bargaining agreements have historically resulted in more generous benefits as opposed to an increase in wages. In addition, these agreements are often multi-year deals (as opposed to year-to-year agreements in non-union firms) and as a result labor advocates felt that the tax would unfairly hit many middle-class families for years to come. Below are the changes, and now that the revenue provision is supported by groups like the SEIU and AFL-CIO the House should similarly follow suit:

-Excise tax threshold INCREASED from $8,500/$23,000 for individuals/families to $8,9000/$24,000, begins in 2013.
-Indexing of threshold UNCHANGED at CPI (inflation)+1% (important cost-containment mechanism as health inflation is comparatively greater)
-After 2015, tax threshold EXCLUDES dental and vision plans for ALL Americans (around a $2,000 value)
-INCREASED threshold adjustments for plans with high number of older workers, women, high risk individuals and qualified retirees.
-Delay of tax until 2018 for unions and state/local employee plans to be able to re-negotiate their collective bargaining agreements
-Open the Exchange to ALL employer plans by 2017

The final clause is extremely significant, as it establishes validity that the future Exchange will not just be another high-risk pool subject to adverse selection for those outside the group market. When large companies enter the Exchange, new-found bargaining power can better hold insurers to adequate consumer protections and high-value care. Insurers will want to go after the increased market share, and more customers in a regulated market means more effective innovation and competition. When companies that have been successful at holding down health care costs (like Safeway) are able to quickly enter the Exchange, transparency mechanisms within can translate these effective practices across organizations and industries.

The compromise sacrifices $60B of revenue over 10 years, so lawmakers will have to include another source (most likely the increased Medicare payroll/investment tax). This was the snowball-at-the peak though, as the rest of the spending differences couldn't be addressed until the financing was there. As such, a bill may be score-able enough to be sent to CBO by tomorrow while Congress works out non-budgetary differences (that Obama will be sure to address in today's Issues Conference {Obama's remarks at 7:30 in the video} with the House Democratic Caucus). The CBO may need as many as 10 days to score the bill, though, and some reports indicate that the President's Signature/State of the Union Address combo may even get pushed back to February 9th.

Top Congressional leaders have just ended eight hours of negotiations in the White House Cabinet Room with President Obama and members of his Administration in order to reach agreement on a final health care bill. The attendees included Representatives Pelosi, Rangel, Steny Hoyer (Md.), James Clyburn (S.C.), George Miller (Calif.), and Henry Waxman (Calif.) in addition to Senators Chris Dodd, Harry Reid (Nev.), Dick Durbin (Ill.), Max Baucus (Mont.) and Tom Harkin (Iowa). Union leaders were also in attendance.

The President continued his newfound 'executive influence' today by calling for a National Health Insurance Exchange, and this is now the central fighting point for the House. In addition to the compromises reached earlier this week with a combination scaled-back Excise tax (also supported by Obama)/Medicare payroll tax expansion, it appears that the House is now willing to remove their employer 'pay-or-play' requirement in favor of the less-robust Senate version. The Senate employer shared responsibility provision protects many employees from unaffordable insurance, but there may be some market distortion issues that you can read about here and here.

Provisions still on the table:

-133% FPL Medicaid expansion (more likely) vs. 150% Medicaid expansion
-Degree of income-related insurance subsidies (which may now be lowered to the Senate's level as revenue will be lost as a result of the employer requirement agreement unless new revenue sources are created)
-Fate of insurer anti-trust exemption
-Fate of Medicare Independent Payment Advisory Board
-Extent of Medicare Advantage payment reductions

The Public Option received CPR this week, only to see it go back into the ICU with a House vote tally coming up short and Senator Lieberman making bold claims against the idea. You can read a rebuttal to Joe's peculiar reasoning here. Regardless of the sound-byte-of-the-day theme that has been going on in DC lately, the House is definitely a few votes short of being able to pass a Robust Public Option (with Medicare +5% rates). On the Senate side the CBO is crunching the numbers on a few versions of the bill that Reid sent them, which may or may not sway the middle votes like Lieberman, Nelson, and Landrieu. The centrists will certainly vote for the bill to come to the floor, which will allow for several weeks of amendments to effectively address their concerns.

The White House Office of Health Reform's Nancy-Ann Parle took a step-back in yesterday's New Republic conference by giving a list entitled: "The 7 Things That Don't Get Talked About Enough." The list encompasses substantial improvements that health reform will bring about, and deliberately leaves out the Option. Not to say that the Public Option wouldn't be an effective coverage and cost containment mechanism, but it is important to remember that whatever form it takes should not predicate the 'success' or 'failure' of reform. It is merely a piece of the puzzle.

7 Things That Don't Get Talked About Enough:

1) Positive impact on small business (which Obama linked to growth here
2) Affordable coverage for young adults (and better risk pools for all by including this healthy group)
3) Stronger transparency and accountability in health insurance industry (medical loss ratios, data reporting, etc.)
4) Lower costs to consumers (removing pre-existing condition exclusions, uncompensated care costs)
5) Delivery system reform (paying for performance pilot programs, etc.)
6) Administrative simplification (claims form standardization and electronic communication development), ex: Health insurance claims process costs $7.50 compared to pennies in other insurance industries
7) CMS Innovation Center (to promote best practices, isolate regional disparities, improve quality)

I woke before dawn yesterday along with 12,000 others to attend a health reform rally at the University of Maryland. Gracing us with their presence were the Secretary of Commerce, both Maryland Senators, the Maryland governor, a number of Representatives, the Mayor, and the big cheese himself President Obama.

Below are some more pictures from the event, and a few quotables from his speech to the student-dominated crowd.

As all eyes will be on President Obama's speech this evening and with Congress getting a good jump out of the September blocks, I thought it would be useful to asses where we stand in the overall process:

-Health reform bills have passed out of 4 of the 5 relevant committees (3 in the House, 1 in the Senate), with the Senate Finance Committee expected to begin markups and amendments of their version the week of Sept. 21, with or without Republican support.

-The President's speech should effectively put an end (at least inside the Beltway) to the many August myths, while reiterating the fact that over 80% of the reform proposals are generally agreed upon. The President will also explain details of the plan much more clearly than in recent appearances, and will most likely continue to show support of the public option, though any concrete instructions for its inclusion/removal are unlikely.

-The Finance Committee version will NOT include a public option and it remains to be seen if the eventual HELP and Finance Committee merged bill will be able to pass on the Senate floor containing the provision.

-The House bills will merge into a single bill over the next few weeks, with a possible House floor vote by the end of the month. The single bill WILL include a public option.

-The combined Senate version may still use the reconciliation process (see earlier post on specifics) if the bill hits further delay. Stay tuned to this particular front, as it is the Senate floor bill that will prove how strong reform will ultimately be.

-Once bills pass the House and the Senate, a Conference Committee made up of Representatives and Senators will construct a single bill to be voted on a final time, presumably by mid to late October.